I might facing the same bug, but with different apparence.

Me too upgrade from 13.10 desktop to 14.04, 64-bit edition. However, I
didn't use ISO, I just followed the prompt asking for upgrade to 14.04.
My home directory is encrypted too.

And since it's just a 'do-release-upgrade', I haven't changed my
password.

After upgrade, I can logged in, however, the home directory is not
usable. I attached the screenshot for what I saw.

I tried switch the 'lightdm' to 'gdm', and it doesn't work.

I also tried use ssh to log in as my user, and guess what? Everything in
$HOME is accessible, it's been correctly decrypted and mounted.

So, I found a temporary workaround for this. Assume my username is 'bar'

1. Create another user 'foo';
2. After reboot, first log in as 'foo';
3. Open 'terminal', and run `ssh bar@localhost`;
4. Don't log out, just SWITCH to user 'bar', and log in;
5. All Home directory is accessible, somehow;


But why 'gdm' or 'lightdm' logged in cannot decrypt my home directory as 13.10?


** Attachment added: "Encrypted Home directory is not usable after upgrade to 
14.04"
   
https://bugs.launchpad.net/ubuntu/+source/ubiquity/+bug/1308530/+attachment/4088750/+files/a.png

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https://bugs.launchpad.net/bugs/1308530

Title:
  Cannot login after an upgrade from Saucy to Trusty with Ubiquity and
  encrypted home directory

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